Trump’s DOJ Launches Criminal Probe into Fed Chair Powell
In a striking escalation of tensions between the White House and the Federal Reserve, the U.S. Department of Justice (DOJ) under President Donald Trump has launched a criminal investigation into Federal Reserve Chair Jerome Powell.
The probe, revealed by Powell himself in a rare public video statement on January 11-12, 2026, centers on his congressional testimony last summer regarding a multi-billion-dollar renovation project at the Fed’s headquarters in Washington, D.C. Prosecutors issued grand jury subpoenas to the Federal Reserve, with threats of criminal indictment over allegations that Powell may have misled Congress about the scope and costs of the roughly $2.5 billion project, which has faced criticism for overruns.
Powell described the investigation as “unprecedented” and argued it was politically motivated. He stated that the real motivation appeared to stem from the administration’s frustration with the Fed’s refusal to slash interest rates as aggressively as President Trump has demanded publicly since returning to office. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said, emphasizing the importance of the central bank’s independence.
The investigation is being led by the U.S. Attorney’s Office in the District of Columbia, reportedly approved under Jeanine Pirro, a Trump ally appointed to the role. President Trump, in interviews, denied direct knowledge of the probe while reiterating criticisms of Powell, calling him ineffective on both monetary policy and building management.
The move has drawn widespread backlash. Former Fed chairs, including Janet Yellen, condemned it as “extremely chilling” for institutional independence. Bipartisan criticism emerged even from some Republican senators on the Banking Committee, such as Thom Tillis (who vowed to block Trump Fed nominees until the matter resolves) and others who questioned the criminal framing. House Democrats demanded a congressional inquiry into whether the DOJ was being weaponized. Wall Street analysts and global economic observers expressed concerns about potential damage to the Fed’s credibility and U.S. financial stability.
Powell’s term as chair ends in May 2026, though he remains a Fed governor until 2028. The episode has intensified speculation about his successor and raised questions about the boundaries between executive authority and central bank autonomy—a principle long viewed as essential for sound economic policymaking.
As the investigation unfolds, it underscores the high-stakes clash between political pressures and the Fed’s traditional insulation from short-term executive influence, with implications for markets, monetary policy, and institutional norms in the current administration.